Articles Posted in Utility Law

The Indiana Tax Court recently examined in Aztec Partners, LLC v. Ind. Dep’t of State Revenue, No. 49T10-1210-SC-00067, 2015 Ind. Tax LEXIS 29 (Ind. Tax Ct. June 23, 2015), whether electricity that Aztec Partners, LLC (“Aztec”), who operates nineteen Qdoba Mexican Restaurants in Indiana, used to power electrical equipment was subject to Indiana sales tax. The Court found it was not and reversed the Department of State Revenue’s (the “Department”) final determination and remanded the case.

At Aztec’s Qdoba Restaurants, employees prepare food items that are ultimately combined and served as entrées. Those food items are held and preserved in electrical equipment, such as food warmers and cooling systems, until they are combined into entrées and sold. The electrical equipment is not used to cook the food. In June 2011, Aztec filed twelve refund claims with the Department for the refund of sales tax paid on the electricity used to power electrical equipment. The Department denied the refunds finding that the electricity was taxable. Aztec protested the refund denial. Thereafter, the Department held a hearing and issued a Memorandum of Decision on August 24, 2012 denying that protest. Aztec initiated an original tax appeal.
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The Indiana Court of Appeals recently interpreted a land developer’s contract with an Indiana town in Carroll Creek Development Company Inc. v. Town of Huntertown, 9 N.E.3d 702 (Ind. Ct. App 2014). The contract provided that the developers could recoup nearly five-hundred thousand dollars of their water main construction costs through connection charges levied against land owners in a defined “excess area” if the land owners chose to directly or indirectly connect to the water main within the subsequent fifteen years.
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OSHA’s final rule revised or implemented eleven provisions in the Construction of Electrical Power Transmission Standard, 29 CFR 1926, subpart V, including provisions regarding: (1) host employers and contractors; (2) training; (3) job briefings; (4) fall protection; (5) insulation and working on or near live parts; (6) minimum approach distances; (7) protection from electric arcs; (8) deenergizing transmission and distribution lines and equipment; (9) protective grounding; (10) operating mechanical equipment near overhead power lines; and (11) working in manholes and vaults. OSHA also adopted a new construction standard on electrical protective equipment, 29 CFR 1926.97, and revised general industry and construction sections 29 CFR 1910.137 and 1910.269 mostly to incorporate the changed standards.

The host employers and contractors provision includes requirements for host employers and contract employers to exchange information on hazards and on the conditions, characteristics, design, and operation of the host employer’s installation. It also includes a requirement for host employers and contract employers to coordinate their work rules and procedures to protect all employees.
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The Indiana Court of Appeals recently interpreted a land developer’s contract with an Indiana town in Carroll Creek Development Company Inc. v. Town of Huntertown, 9 N.E.3d 702 (Ind. Ct. App 2014). The contract provided that the developers could recoup nearly five-hundred thousand dollars of their water main construction costs through connection charges levied against land owners in a defined “excess area” if the land owners chose to directly or indirectly connect to the water main within the subsequent fifteen years.
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The Indiana Court of Appeals recently issued an opinion explaining the difference between two common types of termination clauses in oils and gas leases. The first, known as a “drill or pay” clause, obliges the lessee to either commence production within a certain timeframe or pay advance royalties, but does not operate to automatically terminate the lease in the event of a breach. The second, called an “unless” clause, provides that the lease will automatically terminate if the conditions are not met.
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In January, 2014 the Indiana Court of Appeals found that failure to supply an accurate map of underground facilities may bar negligence suits against contractors who properly file an intent to excavate with the Indiana Underground Plant Protection Service in compliance with the Indiana Damage to Underground Facilities Act (DUFA). City of Fort Wayne v. Northern Indiana Public Service Company, 2 N.E.3d 60 (Ind. Ct. App. 2014). If the contractor files the intent to excavate and obtains defective “locates” from the operator of the underground facility, then the contractor has a defense to damages claims under Indiana Code § 8-1-26-22(c).
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HEA 1423 was signed into law on March 27, 2014 and it makes two important changes.

1) The new law expands the temporary discount program for companies hiring in Indiana by:

• reducing the threshold for utility discount applications from a maximum demand of at least ten megawatts to five megawatts
• opening the discount to prospective employers, who may be considering locating a new facility in Indiana. (Previously, the discount was available only to existing employers expanding operations.)

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An Indiana appellate court has recently upheld the judgment of a trial court, holding that a sewer lien could not be enforced by selling a property at a tax sale when that lien was the only lien that existed on the property.

In In re: Carroll County 2012 Tax Sale, 993 N.E.2d 635 (Ind. Ct. App. 2013), a regional sewer district (“SD”) serviced an area within which the property owners (“Owners”) possessed property. When the Owners did not pay their sewer bills on time, SD perfected a lien against the property and certified those liens to the county auditor and treasurer for collection with the property tax bill. The auditor and treasurer then applied for a judgment and order of sale for the property in the trial court due to satisfy unpaid property taxes and special assessments (the sewer bills). Soon after, the Owners paid the outstanding property taxes, leaving the only lien on the property to be the sewer lien.
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The Indiana Supreme Court recently reversed the judgment of a trial court which had granted a city’s motion to strike the jury trial request of a utility companies and the city’s motion for partial judgment on the pleadings in a case where the utility company challenged the compensation amount awarded for condemnation of its property by a city’s board of public works under an eminent domain statute.

In Utility Center, Inc. v. City of Fort Wayne, 985 N.E.2d 731 (Ind. 2013), the City of Fort Wayne (“the City”) through its Board of Public Works (“the Board”) passed a resolution appropriating and condemning a fraction of water and sewer facilities owned by Aqua Indiana, Utility Center, Inc. (“Utility Center”) that served approximately 12,000 customers. In 2003, the Board assessed damages of $17,202,499.50, but then adjusted them to $14,759,500.00 in 2004. Utility Center then challenged the condemnation by alleging that the City failed to follow proper eminent domain or condemnation statutes.
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An Indiana appellate court recently affirmed a trial court’s decision to dismiss a plaintiff’s complaint for damages, attorney’s fees and an injunction for lack of jurisdiction and the plaintiff’s failure to exhaust administrative remedies prior to filing suit.

In Bridges v. Veolia Water Indianapolis, LLC, 978 N.E.2d 447 (Ind. Ct. App. 2012), Veolia turned off Bridges’ water for nonpayment. Bridges then attempted to file a class action lawsuit for breach of contract, seeking a return of her $25 reconnection fee, other unspecified damages, attorney’s fees, and an injunction. Veolia is an independent contractor that managed and operated water treatment and distribution facilities owned by the Department of Waterworks. It moved to dismiss Bridges’ complaint and argued that the trial court lacked subject matter jurisdiction over the matter because she failed to exhaust the administrative remedies available to her at the Indiana Utility Regulatory Commission (“IURC”). The trial court agreed with Veolia and dismissed the complaint for those reasons. Bridges then appealed.
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